THE COMMITTEE ON OVERSIGHT AND INVESTIGATIONS Hon. Eric Gioia Chair THE COUNCIL OF THE CITY OF NEW YORK Hon. Gifford Miller Speaker Prescription Drug Prices: All Over the Map Manhattan Manhattan Staten Island Staten Island Brooklyn Brooklyn Queens Queens Bronx Bronx $128.00 $81.95 $102.87 $85.00 $93.69 $102.39 $76.00 $94.66 $60.19 $88.00 $102.00 $101.99 $88.45 $97.87 Various prices obtained for the same drug in each borough. FEBRUARY 2004 A STAFF REPORT TO THE COMMITTEE ON HEALTH Hon. Christine Quinn Chair THE COMMITTEE ON CONSUMER AFFAIRS Hon. Philip Reed Chair
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Prescription Drug Prices: All Over the Map prescription drugs, ... Prescription Drug Prices All Over The Map iv CID finds that while the Drug Retail Price List law was designed to
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THE COMMITTEE ON
OVERSIGHT AND INVESTIGATIONS
Hon. Eric GioiaChair
THE COUNCIL OF
THE CITY OF NEW YORK
Hon. Gifford Miller Speaker
Prescription Drug Prices: All Over the Map
ManhattanManhattan
Staten IslandStaten Island
BrooklynBrooklyn
QueensQueens
BronxBronx
$12
8.00
$81.9
5
$102.87
$85.00
$93.69
$102
.39
$76.00
$94.66
$60.19
$88.00
$102.00
$101.99
$88.45
$97.87
Various prices obtained for the same drug in each borough.
Appendices Appendix A: Drug Retail Price List Law………………p. A-1 Appendix B: List of Surveyed Pharmacies……………p. B-1 Appendix C: Drug Retail Price List……………………..p. C-1
This report can be found at the Council’s website at www.council.nyc.ny.us
While much attention has been given to Americans flocking to Canada for low-
cost prescription drugs, New Yorkers could be saving more than 40% on their
prescription drug purchases just by traveling to a different borough. A New
York City Council Investigation Division (CID) investigation finds that a senior
citizen with arthritis, high cholesterol, hypertension and gastric acid disorders
could save more than $2,600 per year just by shopping around within New
York City.i Prices for some prescription drugs varied not only between
boroughs, but also within them — with a spread ranging from $30 to $80 for a
single prescription. CID also found that more than 70% of the pharmacies
surveyed did not comply with the New York State (NYS) law requiring that they
make their prescription drug retail prices available to consumers upon request.
State law requires that pharmacies maintain a list of their prices for the 150
most commonly prescribed drugs.ii It also mandates that they update this
Drug Retail Price List at least weekly, distribute the list to consumers upon
request, and post a sign notifying consumers of the availability of the list.iii
This sign is required to be posted in the pharmacy where prescriptions are
accepted or dispensed, or in the pharmacy’s waiting area.iv
The problem of prescription drug price disparities is not new, but the means to
address it effectively are. The Internet has made sharing and disseminating
information cheaper, faster and easier than ever before; using it to maintain
and display online a database of retail drug prices at pharmacies citywide will
i Based on the $2,650.32 difference between the highest and lowest prices found for a year’s supply of monthly prescriptions for Celebrex (for arthritis), Lipitor (for cholesterol), Norvasc (for hypertension) and Prevacid (for gastric acid disorders) — $3,529.08 and $6,179.40, respectively. ii NYS Consolidated Laws. Article 137; Pharmacy §6826. The NYS Board of Pharmacy prepares and distributes this list of 150 medications to every pharmacy annually. iii Ibid. iv Ibid.
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New York City Council Investigation Division
enable the City to make use of and strengthen the State’s laws in an innovative
way. Such an approach would give consumers unprecedented opportunities to
comparison-shop online for their medications, while the public information
would exert pressure on pharmacies to keep prices low for everyone.
CID conducted site visits and a telephone survey of 90 New York City
pharmaciesv to evaluate compliance with this law and determine whether and
how much prices for five commonly prescribed drugsvi varied citywide.
Site Visits CID discovered the following:
• Only 28% percent of the pharmacies had hardcopies of the Drug Retail
Price List available upon request.
• Less than half (46%) of the pharmacies had a sign posted to notify
consumers of the availability of the Drug Retail Price List.
• Only 36% of pharmacies in Staten Island produced hardcopies of the
Drug Retail Price List upon request, yet this was the highest rate of
compliance among the five boroughs. The others rated as follows: the
Bronx (33%), Brooklyn (22%), Manhattan (27%) and Queens (25%).
• Staten Island pharmacies had the highest rate of compliance with the
signage requirement, with 64% posting the appropriate sign to notify
consumers of the availability of the Drug Retail Price list. That compared
to the Bronx (47%), Brooklyn (44%), Manhattan (30%) and Queens (63%).
Telephone Survey CID found the following:
• Sixty-seven (74%) pharmacies gave price quotes to investigators over the
phone.
v The same list of pharmacies was used for both the site visits and the telephone survey. vi The prescription drugs are Lipitor, Allegra, Norvasc, Prevacid and Celebrex.
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• Twenty-three (26%) pharmacies refused to disclose a price over the
phone.
• Major differences in individual drug prices were noted even within the
same borough. The widest variation found was the $78.05 difference in
prices for Prevacid in Manhattan — the highest cash price obtained for a
month’s supply of Prevacid was $208.00, while the lowest cash price was
$129.95. Other examples:
o The Bronx: the highest cash price obtained for a month’s supply of
Celebrex was $102.00, while the lowest was $60.19 — resulting in
a $41.81 difference.
o Brooklyn: the highest cash price obtained for a month’s supply of
Prevacid was $173.99, while the lowest cash price obtained was
$130.00 — a $43.99 difference.
A summary of CID’s findings is presented in Table I below.
Table I – Lowest/Highest Individual Drug Prices Per Borough Borough High/Low Lipitor Allegra Norvasc Prevacid Celebrex
% Difference 16.7% 20.8% 16.3% 14.2% 15.3% Staten Island
Average $79.85 $80.59 $52.62 $146.74 $95.22
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Prescription Drug Prices All Over The Map iv
CID finds that while the Drug Retail Price List law was designed to make
comparison-shopping for prescription drugs easier, significant barriers remain.
Compliance among pharmacies is low. With so little information readily
available, it is still difficult and inconvenient to obtain a sampling of prices for
a given prescription. To give consumers the information they need to effectively
shop around for the lowest-cost prescription drugs and to help lower
prescription drug prices, CID recommends the following:
• Pass legislation mandating that the Department of Consumer Affairs
(DCA) track prescription drug prices citywide and disseminate them
online.
• DCA should aggressively enforce the Drug Retail Price List law.
• Pass a resolution calling on the New York State Board of Pharmacy to
implement an awareness campaign to educate consumers about the
Drug Retail Price List.
• Pass a resolution calling for the addition of consumer advocates to the
New York State Board of Pharmacy.
• Consumers: Shop Around.
• Introduce legislation requiring the City of New York to create a
prescription drug discount program.
• Introduce a resolution calling on Congress to lift prohibitions on
Canadian drug imports.
New York City Council Investigation Division
BACKGROUND
In the face of ever-increasing health-care costs, the large numbers of people
without adequate insurance have forced health care affordability to the fore as
a matter of public policy and legislative action nationwide. Trends in
prescription drug coverage are no different. It is widely acknowledged that
prescription drug prices are high — high enough that some Americans cross
the border into Canada or Mexico to fill their prescriptions at lower cost.1 And
because pharmacies do not advertise their retail prices for prescription drugs,
consumers often do not know whether they are getting the lowest prices
possible.
New York State law has attempted to address this issue. This investigation
was designed to assess how easy it is to comparison-shop for prescription
medication in New York City, how great price disparities between pharmacies
actually are, and what the implications are for New York City consumers.
The High Cost of Prescription Drugs
New York State reportedly has the fourth highest retail drug prices in the
country,2 and an estimated 4.7 million New Yorkers — roughly one in every
four people — do not have prescription drug coverage.3 It is a sad fact that the
high price of prescription drugs forces many people without insurance to
choose between their prescription drugs and other basic needs in order to live
within sometimes tight budgets.4
1 Len Maniace. “Quest for Affordable Drugs.” The Journal News (Westchester County, NY). 5 Oct 2003, 1A. 2 Jennifer Steinhauer. “New York, Which Made Medicaid Big, Looks to Cut It Back.” The New York Times. 3 March 2003. 3 Assemblyman Jeff Klein. Filled Prescriptions, Empty Pockets. 8 June 2003. Also on the web at http://assembly.state.ny.us/mem/?ad=080. [Last accessed 14 January 2004.] 4 See Klein, and Senator Charles Schumer. New Yorkers Spending More Money for Rx Drugs Than People in Most Other States, June 2002.
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The New York Public Interest Research Group (NYPIRG) conducted a recent
survey of pharmacies throughout New York State and compared them to the
prices pharmaceutical companies charge one of its “most favored” customers —
the federal government.5 As a large purchaser, the federal government can
negotiate lower-than-retail prices for the drugs it purchases for veterans,
federal employees and retirees. Using this price, known as the Federal Supply
Price, as a benchmark, the NYPIRG study found that uninsured New Yorkers
are paying, on average, double what the federal government pays.
The high price of prescription medications affects older people most severely.
Senior citizens consume more over-the-counter and prescription medicines
than any other age group.6 Because seniors are more likely to suffer from a
number of diseases or disabilities simultaneously, they are also more likely to
require many different drugs at the same time. Seniors represent 13% of the
total population, yet account for 34% of all prescriptions dispensed and 42% of
all prescription drug spending.7
Many senior citizens face the prospect of deteriorating health while living
within a fixed income. A 2002 study found that 19% of seniors in New York
State had no form of prescription drug coverage,8 and that these seniors were
more likely than average not to fill prescriptions due to cost, to skip doses to
make their prescriptions last longer and to spend less on other basic needs in
order to afford prescription medication.9
5 Blair Horner et al. “A Bitter Pill: The High Cost of Prescription Drugs in New York State.” October 2003. The Department of Veterans Affairs oversees the federal supply schedule prices, available online at www.vapbm.org/PBM/prices.htm. 6 The National Institution on Aging. Health Information – Medicines: Use Them Safely. Also on the web at www.nia.nih.gov/health/agepages/medicine.htm [Last accessed 23 September 2003]. 7 Families USA. Hard to Swallow – Rising Drug Prices for America’s Seniors. November 1999. Also on the web at www.familiesusa.org [Last accessed 14 January 2004]. 8 Dana Gelb Safran et al. “Prescription Drug Coverage and Seniors: How Well are States Closing the Gap?” Henry J. Kaiser Family Foundation and the Commonwealth Organization. Available at http://content.healthaffairs.org/cgi/reprint/hlthaff.w2.253v1.pdf. Exhibit 2. 9 Ibid., Exhibit 6.
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In efforts to lower prescription drug prices for the uninsured or underinsured,
state and local jurisdictions around the country have instituted their own
measures to bring lower prices to consumers. These efforts have largely taken
the form of prescription drug discount programs.
By aggregating consumer demand, the Pharmacy Benefit Managers (PBMs) who
administer these prescription drug discount programs can use their
participants’ market power to negotiate discounts with pharmaceutical
companies and/or networks of pharmacies. PBMs charge members a fee for a
prescription drug discount card that gets them discounts ranging from five to
more than 50 percent. AARP, for example, offers its members one such card
for $19.95 annually.10 Numerous counties and states have begun to
implement similar programs.11
In New York State, Nassau County issued a Request for Proposals (RFP) in
October 2003 for a county-wide pharmacy discount card program to offer
residents “significant discounts” at “most” retail pharmacies in the County “at
little or no cost to County residents.”12 Because costs will be borne by
residents as a fee for enrollment, the program is designed to have no budgetary
impact on Nassau County. New York City Council Speaker Gifford Miller has
proposed that New York City join Nassau County’s RFP and called on Mayor
Michael Bloomberg to use his executive authority to do so.13 While Mayor
Bloomberg has not publicly given a position on this proposal, he has informed
10 AARP Health Care Options Pharmacy Services. http://www.aarppharmacy.com/AARPnet/mc/mcSaveMore.aspx. [Last accessed 26 Jan 2004.] Annual AARP membership, required to qualify for this program, is an additional $12.50 (“Join AARP.” http://www.aarp.org/membership/aarp/Articles/join.html [Last accessed 26 Jan 2004].). 11 See Mark Hornbeck and Charlie Cain. “Michigan Uninsured to Get Prescription Discounts.” The Detroit News.25 Jan 2004, 1A. 12 Request for Proposals (RFP) for Pharmacy Discount Card Program. Nassau County Office of the Comptroller. 31 Oct 2003, 8. 13 Letter to the Honorable Michael R. Bloomberg. 19 Nov 2003.
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the Nassau County Comptroller’s office that the City of New York will not be
joining this program.14
Taking advantage of pharmaceutical industry practices that set prices
significantly lower in Canada than in the United States, the City of Springfield,
Massachusetts, began purchasing prescription drugs from Canada this past
summer for its workers and retirees. In its first three months, the program
enrolled 1,600 people and reportedly saved enrollees $600,000.15 Montgomery,
Alabama has since followed suit. In the meantime, a number of states are also
exploring this option.16
Because drugs from foreign countries are not inspected and approved by the
U.S. Food and Drug Administration (FDA), they do not have the same
guarantees of safety that drugs sold in the United States do. Nevertheless, in
an independent study, the State of Illinois concluded that Canadian drug
imports were safe, and that Canadian regulatory systems provide “substantially
equivalent protection for the health and safety of the public” as is found in
Illinois.17 The FDA maintains that importing drugs from Canada is illegal and
unsafe.18
Citing high potential savings, Mayor Michael R. Bloomberg joined Illinois
Governor Rod Blagojevich in petitioning the FDA to allow cities and states to
14 Communication between Nassau County Comptroller’s office and New York City Mayor’s office. 20 Jan 2004. 15 “Springfield Meds: By the numbers.” City of Springfield, Massachusetts. http://www.cityofspringfieldmass.com/springfieldmeds.htm [Last accessed 27 Jan 2004]. 16 Deborah Barfield Berry. “Crossing the Border; Cities, states turn to Canada to cut drug costs.” Newsday. 2 Nov 2003, A5. 17 Ram Kamath, Pharm.D. and Scott McKibbin. Report on Feasibility of Employees and Retirees Safely and Effectively Purchasing Prescription Drugs from Canadian Pharmacies. Office of Special Advocate for Prescription Drugs, Illinois Department of Central Management Services. 27 Oct 2003. 18 Gardiner Harris and Monica Davey. “U.S. Steps Up Effort Against Drug Imports.” The New York Times. 24 Jan 2004, C1.
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import prescription drugs from Canada.19 At the time, Mayor Bloomberg
asserted that “[his] administration supports any measure that will bring down
drug costs for New Yorkers.”20
Prescription Drug Price Disparities
Beyond the generally high prices of prescription medication, several studies —
dating at least as far back as 198521 — have found that retail prescription
prices in New York State and New York City can vary from pharmacy to
pharmacy, sometimes widely. A statewide investigation released in May 2002
by New York State Attorney General Eliot Spitzer found, for example, that the
cash price of the cholesterol drug Lipitor varied more than $50 between
pharmacies in Westchester County.22 Finding similarly disparate prices in New
York City, DCA Commissioner Gretchen Dykstra committed to “using [the
agency’s] authority to address this issue.” 23
Empirical research shows that price-shopping for prescription drugs is
generally low — around 10% of consumers actively comparison-shop — even
19 “Mayor Michael R. Bloomberg Joins Illinois Governor Rod Blagojevich in Petitioning the FDA to Let States and Cities Import Prescription Drugs from Canada” [press release]. 29 Oct 2003. http://home.nyc.gov/portal/index.jsp?pageID=mayor_press_release&catID=1194&doc_name=http%3A%2F%2Fhome.nyc.gov%2Fhtml%2Fom%2Fhtml%2F2003b%2Fpr308-03.html&cc=unused1978&rc=1194&ndi=1 [Last accessed 27 Jan 2004]. 20 “Mayor Michael R. Bloomberg Joins Illinois Governor Rod Blagojevich in Petitioning the FDA to Let States and Cities Import Prescription Drugs from Canada.” Press Conference. 29 Oct 2003. Online video at http://www.nyc.gov/html/om/html/2003b/pca102903.asx [last accessed 28 Jan 2004]. 21 William R. Greer. “Prices for Drugs Vary Widely, Study Finds.” The New York Times. 28 Dec 1985, 48. For reports of similar studies through the years, see also Associated Press. “A Bitter Pill, and Dearer.” The New York Times. 27 Feb 1995, B3; Margaret Ramirez. “Giuliani: Compare Medicine Prices/Survey: Queens Has Best Costs.” Newsday. 26 Jan 1997, A20; and Angela Mosconi. “Big Swings Found in Prescription Prices Here.” New York Post. 24 Feb 2000, 9. 22 “Statewide Investigation Reveals Widespread Violation of Price Posting Law; Spitzer promotes consumer awareness for prescription drug pricing” [press release]. Office of New York State Attorney General Eliot Spitzer. 8 May 2002. http://www.oag.state.ny.us/press/2002/may/may08a_02.html. [Last accessed 16 Jan 2004.]
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though price disparities can be great.24 This suggests that the time, effort and
resources involved in comparison-shopping for drugs is greater than the
anticipated savings — that is, that consumers resign themselves to the price
they’re charged at the cash register because they can not easily find better
prices elsewhere.25
To make price-shopping easier, a 1973 New York State law mandated that
pharmacies display a Prescription Price Poster, a list of 150 commonly
prescribed drugs with each pharmacy’s prices handwritten on the poster. The
law contained no requirement that the prices on the poster be regularly
updated, and many of the same studies that found widely disparate
prescription drug prices within New York State or City also found extremely
poor compliance with the Prescription Price Poster law.26 On August 6, 2002,
the New York State Legislature amended this law to create a regularly updated
Drug Retail Price List.27 The State’s intent was not only to allow consumers to
have easy access and up-to-date prescription prices, but also to encourage
consumers to comparison-shop for lower drug prices.28
The law now requires that the New York State Board of Pharmacy — a body
comprised of nine State-certified pharmacists charged with monitoring
compliance with pharmacy regulations29 — annually compile a list of the 150
most commonly prescribed drugs, and provide this list to all pharmacies
registered in the State. Each pharmacy is required to append its prices to this
23 “Seniors in Same Neighborhoods Pay Widely Different Prices for the Same Prescription Drug, DCA Survey Says” [press release]. New York City Department of Consumer Affairs. 24 Sept 2002. Also at www.ci.nyc.ny.us/html/dca/html/norc_pr.html [Last accessed 20 Jan 2004]. 24 Alan T. Sorenson. “An Empirical Model of Heterogeneous Consumer Search for Retail Prescription Drugs.” 14 Sept 2001. 25 Ibid., at 18. 26 For example, Spitzer. See also Greer, and Frankie Edozien. “Green Has an Rx for Pill-Price Gouger$.” New York Post. 6 Aug 2000. 27 New York State Senate Bill S.4647-A amended the New York State Consolidated Laws, Article 137; Pharmacy §6826. 28 Governor’s Approval Memorandum #2. Retail Drug Price Lists – Chapter 284, S. 4647-A. New York State Legislative Annual 2002, 165.
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annual list to create its Drug Retail Price List. Pharmacies are required to
update the prices weekly, and distribute a copy of the list to consumers upon
request. They are also required to post a sign, either in the waiting area or
where prescriptions are accepted or dispensed, advertising the availability of
this list. The law gave pharmacies one year from its enactment to come into
compliance.
Neither State nor City law requires pharmacies to disclose their prescription
drug prices over the phone, but the New York State Board of Pharmacy
encourages the practice as a matter of policy.30
While this investigation probes New York City’s prescription drug price
disparities, Suffolk County has made prescription drug prices in its pharmacies
public, with a program that asks pharmacies to submit their prices for
commonly prescribed medications.31 The information is posted quarterly on
the county website.32 This is a voluntary program, however, and only 12
pharmacies in the county currently participate.33
29 New York State Consolidated Laws, Article 137; Pharmacy §6804. 30 Office of the Professions – New York State Education Department. Questions and Answers for Pharmacist and Pharmacies – October 2003. Also on the web at www.op.nysed.gov/pharmqa703.htm, last accessed 26 November 2003. 31 Henry Gilgoff. “Suffolk Drug Program Still Strong.” Newsday. 23 Mar 2003, F9. 32 Suffolk County Prescription Drug Cost Comparison Program. http://www.co.suffolk.ny.us/Office%20for%20the%20Aging/Drug%20Survery%20master.pdf. Last accessed 20 Jan 2004. 33 Infra note 31.
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METHODOLOGY
Council Investigation Division (CID) investigators surveyed pharmacies
throughout New York City, both through site visits and by telephone, to
determine whether:
• A sign was posted indicating that the Drug Retail Price list was available;
• Hardcopies of the Drug Retail Price list were available;
• Price quotes could be obtained; and
• Prescription drug prices varied between and within boroughs.
Pharmacy locations were randomly chosen from within four community
districts in each borough.34 CID randomly chose 20% of the pharmacies
available within each community district, for a total of 90 locations citywide.
Investigators visited 15 pharmacies in the Bronx, 18 in Brooklyn, 30 in
Manhattan, 16 in Queens and 11 in Staten Island.
Site Visits
CID investigators conducted site visits to determine whether the pharmacies
posted signs indicating the availability of the Drug Retail Price List and
whether they made hardcopies of the price list available.
After each site visit, investigators filled out a survey form noting:
• Presence or absence of a posted sign notifying consumers of the
availability of the Drug Retail Price list; and
• Availability of hardcopies of the Drug Retail Price list.
34 Staten Island has only three community districts. CID sampled 20% of the borough’s pharmacies.
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Telephone Survey
Because the site visits yielded scanty results,35 CID investigators contacted all
90 pharmacies by phone during normal business hours (Monday through
Friday, 9am to 5pm) to obtain comparative price information for five common
prescription medications. During the calls, investigators told pharmacists that
they had prescriptions for a 30-day supply of the following medications:36
4. Prevacid (30 mg./30 tablets) — prevents the production of acid in the
stomach.
5. Celebrex (200 mg./30 tablets) — used to reduce inflammation and ease
mild to moderate pain due to arthritis.
Investigators asked whether the pharmacists could provide them with the cash
price for each medication over the phone and filled out a survey either noting
the price or that the price was not given. In addition, investigators noted any
additional comments, such as the reason(s) why a pharmacist would not
disclose a prescription drug price over the phone.
35 See Findings. 36 For more information on each of the prescription drugs, see www.pdrhealth.com (the online version of the Physician’s Desk Reference).
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New York City Council Investigation Division
FINDINGS
The following are the results obtained during the investigation:
Site Visits – Cumulative Results
Forty-one (46%) of the pharmacies had a Drug Retail Price list sign posted.
Forty-nine (54%) pharmacies did not post a sign alerting consumers of the
availability of hardcopies of the Drug Retail Price list.
Prevalence of Signs Notifying Consumers of Availability of Drug Retail Price List
46%
54%
Available
Unavailable
Of the 90 pharmacies surveyed, only 25 (28%) of the pharmacies had
hardcopies of the Drug Retail Price list available upon request. Sixty-five (72%)
of the pharmacies visited did not provide hardcopies of the Drug Retail Price
list to consumers upon request.
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General Availability of Hardcopies of the Drug Retail Price List
28%
72%Available
Unavailable
Site Visits – Comparison by Boroughs
In Staten Island, 64% of the pharmacies surveyed posted a sign notifying
consumers of the availability of hardcopies of the Drug Retail Price List. This
was the highest compliance rate of all the boroughs, with Queens marginally
behind at 63% and the others at lower rates (in descending order): the Bronx
(47%), Brooklyn (44%) and Manhattan (30%).
47% 44%
30%
63% 64%
0%
20%
40%
60%
80%
100%
Bronx Brooklyn Manhattan Queens S.I.
Presence of Signs Notifying Consumers of Existence of the Drug Retail Price List
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In a borough-by-borough comparison, Staten Island rated the highest in the
availability of hardcopies of the Drug Retail Price list as well, with a 36%
compliance rate. This compared (in descending order) to the Bronx (33%),
Brooklyn (22%), Manhattan (27%), and Queens (25%).
33%22% 27% 25%
36%
0%
20%
40%
60%
80%
100%
Bronx Brooklyn Manhattan Queens S.I.
Availability of Hardcopies of Drug Retail Price List by Borough
Site Visits – Chain vs. Privately-owned stores
CID also analyzed the results for disparities between chain pharmacies and
privately-owned establishments. With regard to the availability of the sign,
chain pharmacies showed a rate of compliance more than twice as high as
their independently-owned counterparts (61% and 30%, respectively).
Moreover, chain pharmacies had hardcopies of the Drug Retail Price list
available upon request at a slightly greater rate than privately-owned
pharmacies as well—30%, compared to 26%.
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61%
30% 30% 26%
0%
20%
40%
60%
80%
100%
Availability of Posted Sign Availability of Hardcopies
Compliance of Chain vs. Private Pharmacies
Chain Pharmacies Private Pharmacies
Telephone Survey – Cumulative Results
Of the ninety pharmacies contacted by phone, 67 (74%) of the pharmacies gave
price quotes over the phone. Twenty-three (26%) of the pharmacies refused to
disclose their prices over the phone, with most claiming that pharmacists
needed to see the prescriptions before quoting a price. On one occasion, a
pharmacist told an investigator that he couldn’t disclose a price quote over the
phone because it was against the law to do so - which is, in fact, not the case.37
CID determined the lowest price, highest price and citywide average price for all
five prescription drugs. Differences between the highest and lowest prices for
the prescription medications ranged from $28.00 (in the case of Norvasc) to
37 Infra note 30. While it does not compel pharmacists to do so, the New York State Board of Pharmacy does encourage them to provide drug retail prices over the phone.
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$78.05 (for Prevacid). The table below compares these figures to the prices the
Federal government pays for the same type of prescription drugs. 38
Table 1 - Differences in Prices Paid By Uninsured NYC Residents and the Federal Government
Prescription Drug
Lowest Price
Obtained in NYC
Highest Price
Obtained in NYC
Average cash price paid by
uninsured NYC residents
Federal Supply Price (FSP)
% Difference bet. FSP and
Avg. NYC Cash Price
Lipitor $62.00 $109.00 $80.58 $41.12 96%
Norvasc $41.95 $69.95 $53.74 $26.03 106%
Prevacid $129.95 $208.00 $153.34 $85.66 79%
Celebrex $60.19 $128.00 $97.40 $66.60 46%
Allegra $61.95 $106.00 $82.33 $46.43 77%
Telephone Survey – Comparison by Boroughs
Between Boroughs With respect to the ease with which it was possible to obtain price information
over the phone, Staten Island had the highest rating with 100% success. This
compared (in descending order) to Queens (81%), Brooklyn (78%), Manhattan
(70%) and the Bronx (53%).
38 The Federal Supply Price (FSP) was downloaded from the Federal Supply Schedule (www.vapbm.org/PBM/prices.htm) on 15 January 2004. Since the FSP does not include pharmacy dispensing fees, an extra $4 was added to each price to reflect a reasonable fee. This is consistent with the methodology employed by Horner et al. (see note 4).
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53%
78%70%
81%
100%
0%
20%
40%
60%
80%
100%
Bronx Brooklyn Manhattan Queens S.I.
Ability to Obtain Price Quotes Over the Phone
On average, Manhattan pharmacies charged higher prices than pharmacies in
the other boroughs, regardless of medication. When comparing the average
prices obtained between boroughs for each prescription drug, the following
results were obtained:
• Lipitor: The highest average price obtained came from pharmacies
located in Manhattan with an average price of $83.89. This compared to
the average prices obtained from pharmacies located (in descending
order) in Staten Island ($80.36), the Bronx ($79.65), Brooklyn ($79.51)
and Queens ($77.12).
• Allegra: The highest average price obtained came from pharmacies
located in Manhattan with an average price of $85.59. This compared to
the average prices obtained from pharmacies located (in descending
order) in the Bronx ($83.83), Brooklyn ($80.94), Staten Island ($80.67)
and Queens ($79.07).
• Norvasc: The highest average price obtained came from pharmacies
located in Manhattan with an average price of $55.99. This compared to
the average prices obtained from pharmacies located (in descending
Prescription Drug Prices: All Over The Map 15
New York City Council Investigation Division
order) in the Bronx ($54.33), Brooklyn ($52.90), Queens ($52.40) and
Staten Island ($51.69).
• Prevacid: The highest average price obtained came from pharmacies
located in Manhattan with an average price of $158.53. This compared to
the average prices obtained from pharmacies located (in descending
order) in the Bronx ($153.55), Brooklyn ($153.18), Queens ($149.24) and
Staten Island ($148.36).
• Celebrex: The highest average price obtained came from pharmacies
located in Manhattan with an average price of $100.69. This compared to
the average prices obtained from pharmacies located (in descending
order) in Staten Island ($97.23), Brooklyn ($96.73), Queens ($95.62) and
the Bronx ($93.26).
Within Boroughs Some significant differences were found in the prices pharmacies within the
same borough were charging. The following are the biggest such differences
found:
• In the Bronx, the highest cash price obtained for a month’s supply of
Celebrex was $102.00, while the lowest cash price obtained was $60.19 –
a $41.81 difference.
• In Brooklyn, the highest cash price obtained for a month’s supply of
Prevacid was $173.99, while the lowest price obtained was $130.00 – a
$43.99 difference.
• In Manhattan, the highest cash price obtained for a month’s supply of
Prevacid was $208.00, while the lowest cash price was $129.95 – a
difference of $78.05.
The table below summarizes our findings.
Prescription Drug Prices: All Over The Map 16
New York City Council Investigation Division
Table 2 – Lowest/Highest Individual Prices Per Borough
Based on these findings, a hypothetical senior citizen with arthritis, high
cholesterol, hypertension and gastric acid disorders could be paying anywhere
from $294.09 to $514.95 every month for the medications — Celebrex, Lipitor,
Norvasc and Prevacid, respectively — to treat these conditions — a $220.86
difference.
Telephone Survey – Chain vs. Privately-owned stores
CID also looked at differences in prices between chain and privately owned
pharmacies. It was observed that the prices obtained from chain pharmacies
were slightly higher than the prices charged by privately owned pharmacies.
The average difference in prices varied from $0.20 to $6.40 per prescription
drug.
Prescription Drug Prices: All Over The Map 17
New York City Council Investigation Division
$80.46$80.66
$80.50$83.65
$53.04 $54.25
$149.62 $156.02
$95.42$98.72
$0
$25
$50
$75
$100
$125
$150
$175
Lipitor Allegra Norvasc Prevacid Celebrex
Comparison Of Average Prices for Privately-Owned Pharmacies vs. Chain Pharmacies
Privately-Owned Stores Chain Stores
Prescription Drug Prices: All Over The Map 18
New York City Council Investigation Division
CONCLUSIONS
As our findings show, prices for identical prescriptions can vary from pharmacy
to pharmacy in New York City by as much as $30 to $80; a price in one
pharmacy can be more than twice as expensive as it is in another. While
everything else at a drug store has a price tag stamped on it, prices for
prescription drugs often remain a mystery until a clerk rings them up at the
cash register. The intent of New York State’s Drug Retail Price List law was to
make this information open and available, thereby making it easier for
consumers to comparison-shop.
Nevertheless, a number of factors are blunting this law’s efficacy, with
widespread noncompliance first and foremost among them. Only 28% of
pharmacies investigated actually had a Drug Retail Price List available for
consumers. This is unfortunate, because consumers could realize potentially
hundreds or even thousands of dollars in savings every year, given the
information. As the situation now stands, the law does not and cannot provide
meaningful opportunities for consumers to comparison-shop.
When DCA found evidence of significant price disparities for prescription drugs
in New York City in 2002, Commissioner Dykstra pledged to use her agency’s
authority to address the issue. Our research did not unearth any evidence that
DCA has taken action on it since that time. There is, however an obvious and
urgent need for enforcement; DCA can and should undertake to enforce this
law aggressively.
In the meantime, consumer demand can also help nudge pharmacies into
compliance with the Drug Retail Price List law. With increased consumer
awareness, uninsured and underinsured New Yorkers will know that they can
Prescription Drug Prices: All Over The Map 19
New York City Council Investigation Division
and should ask for any pharmacy’s Drug Retail Price List before they get their
prescriptions filled.
The problem of prescription drug price disparities is not new, but we finally
have effective tools to address it. The Internet, which has made sharing and
disseminating information cheaper, faster and easier than ever before, can
enable us to make use of and strengthen the existing laws in an innovative
way. The Drug Retail Price List law already mandates that pharmacies update
the prices on the list on a weekly basis. A program similar to Suffolk County’s,
whereby pharmacies submit their prescription drug prices to the local
government so they can be posted on the Internet for easy comparison, would
bring pricing information into the public domain on an unprecedented scale.
The extremely low participation rates in Suffolk County’s voluntary program
suggest that mandating participation would make the program more useful
and effective.
Furthermore, making public information of retail drug prices citywide will exert
pressure on pharmacies to keep prices low — a boon to consumers throughout
the City.
The New York State Board of Pharmacy is the body charged with monitoring
compliance with pharmacy regulations. By law, it consists of nine State-
certified pharmacists.39 Given the widespread impact of pharmacy regulations
and the large amounts of money consumers spend on prescription
medications, the lack of consumer advocates on the Board of Pharmacy leaves
that body without an important voice.
Prescription drugs in New York City are indeed costly — particularly those
intended to treat chronic ailments rather than episodic bouts of illness. A
39 Infra note 29.
Prescription Drug Prices: All Over The Map 20
New York City Council Investigation Division
year’s supply of Celebrex, which is used to treat arthritis pain and
inflammation, can cost anywhere from $722.28 to $1,234.44, according to our
findings.40 Clearly, a person needing these drugs to maintain his or her health
could face serious financial hardship.
Any policy prescription to address this issue should look at methods to lower
drug prices for consumers. Neither of the strategies considered in this report—
prescription drug discount programs, and importation of Canadian drugs—is a
panacea. Yet given the budgetary and practical constraints that the City of
New York faces, both deserve consideration.
A prescription drug discount program would help millions of New York City
residents with no impact on the City’s tight budget. Whether the City of New
York joins Nassau County’s RFP or issues one of its own, significant benefits
could accrue to New York City residents. While Mayor Bloomberg has declared
he would support “any measure that will bring down drug costs for New
Yorkers,”41 he has failed to seize this opportunity to do just that.
The savings to the City of New York from a Canadian drug importation
program, on the other hand, are potentially vast. Nevertheless, legal obstacles
make such a program currently impracticable. Provided reasonable
expectations of comparable consumer safety measure, however, the FDA
should permit cities and states to import drugs from Canada if they so desire.
In the meantime, we encourage New York City consumers to shop around, and
look within the five boroughs for the best prices they can get. The savings, we
found, can be significant.
40 Based on lowest and highest costs of a 30-day supply of Celebrex ($60.19 and $102.87) found in this survey (see Findings). 41 Infra note 20.
Prescription Drug Prices: All Over The Map 21
New York City Council Investigation Division
RECOMMENDATIONS
Create a More Open Market for Prescription Drugs
• Pass legislation mandating that the Department of Consumer Affairs
(DCA) track prescription drug prices citywide and disseminate them
online.
Legislation is being drafted to mandate that DCA maintain an internet-
based clearinghouse on its website for pharmacies’ retail drug prices.
Working with the Department for the Aging, DCA would email some form of
this information to senior centers, NORC (Naturally Occurring Retirement
Community) programs, Meals on Wheels programs, etc. throughout the City
on a regular basis. DCA’s website would also be designed to allow
consumers to subscribe to periodic emails notifying them of prices for the
drugs they specify at the pharmacies they specify. This would give
consumers an unprecedented opportunity to comparison-shop online before
making any purchases.
• DCA should aggressively enforce the Drug Retail Price List law.
Increased enforcement will increase compliance with the law and literally
put crucial drug price information in consumers’ hands.
• Pass a resolution calling on the New York State Board of Pharmacy to
implement an awareness campaign to educate consumers about the
Drug Retail Price List.
The State Board of Pharmacy needs to extend its education efforts about the
Drug Retail Price List to consumers as well as registered pharmacies
statewide.
Prescription Drug Prices: All Over The Map 22
New York City Council Investigation Division
Prescription Drug Prices: All Over The Map 23
• Pass a resolution calling for the addition of consumer advocates to the
New York State Board of Pharmacy.
Currently, the Board of Pharmacy is made up of nine State-certified
pharmacists. Consumer representation on the Board would be an important
step in assuring that State pharmacy policies and practices do not neglect
the needs of consumers.
• Consumers: Shop Around.
As this investigation finds, huge price differences are possible — and the
only way to realize savings is to shop around. Also, remember to ask for
generic equivalents for brand-name prescriptions whenever possible.
Lower Prescription Drug Costs
• Introduce legislation requiring the City of New York to create a
prescription drug discount program for uninsured City residents.
Mayor Michael R. Bloomberg has not used his executive authority to join
Nassau County in a prescription drug discount program. The City Council
can, and should, introduce legislation to enact such a program, whether in
conjunction with Nassau County or on its own.
• Introduce a resolution calling on Congress to lift prohibitions on
Canadian drug imports.
If, as the State of Illinois found, the Canadian government imposes
substantially similar consumer protections on prescription drugs as does
the United States, the FDA ban on prescription drug imports from Canada
should be lifted so that cities and states can take advantage of lower prices
available abroad.
New York City Council Investigation Division
NYC Pharmacies A-1
APPENDIX A:
Drug Retail Price List Law: New York State Consolidated Laws
Education Law §6826
New York State Consolidated Laws – Education Law §6826
S 6826. Drug retail price lists. 1. Every pharmacy shall compile a drug retail
price list, which shall contain the names of the drugs on the list provided by the
board and the pharmacy’s corresponding retail prices for each drug. Every
pharmacy shall update its drug retail list at least weekly. Every pharmacy shall
provide the drug retail price list to any person upon request.
2. a. The list provided by the board shall be prepared at least annually by the
board and distributed to each pharmacy in the state. The list shall be a
compendium of the one hundred fifty most frequently prescribed drugs together
with their usual dosages for which a prescription is required by the provisions
of the "Federal Food, Drug, and Cosmetic Act" (21 U.S.C. 301, et seq.; 52 Stat.
1040, et seq.), as amended, or by the commissioner of health. The board shall
make the compendium list available to each pharmacy free of charge, both in
printed form and in an electronic form that can be used to produce the
pharmacy’s drug retail list.
b. The drug retail price list shall contain a notice which shall read: "Consult
your pharmacist for the selection of the most economical drug product available
to fill your prescription"
3. The pharmacy’s corresponding retail price means the actual price to be paid
by a retail purchaser to the pharmacy for any listed drug at the listed dosage.
4. Pharmacies shall have a sign notifying people of the availability of the drug
retail price list, conspicuously posted at or adjacent to the place in the
pharmacy where prescriptions are presented for compounding and dispensing,
in the waiting area for customers, or in the area where prescribed drugs are
delivered.
5. Nothing contained herein shall prevent a pharmacy from changing and
charging the current retail price at any time, provided that the listed price is
updated at least weekly to reflect the new retail price.
6. The commissioner shall make regulations necessary to implement this
section, including how this section is applied to mail-order and internet
pharmacies.
New York City Council Investigation Division
NYC Pharmacies B-1
APPENDIX B:
List of Surveyed Pharmacies
List of Surveyed Pharmacies
Pharmacy Name AddressBronx
1 Charmar Pharmacy 781 Lydig Avenue, Bronx, NY 104622 CVS Pharmacy 3775 E Tremont Avenue, Bronx, NY 104653 CVS Pharmacy 732 Allerton Avenue, Bronx, NY 104674 Pathmark Pharmacy Eastchester 1720 Eastchester Road, Bronx, NY 104615 Rite Aid Express 1 Hr. Photo 2426 Eastchester Road, Bronx, NY 104696 Rite Aid Pharmacies 911 Morris Park Avenue, Bronx, NY 104627 Duane Reade Drug Store 2914 3rd Avenue, Bronx, NY 104558 Fuller Drug Store 2688 3rd Avenue, Bronx, NY 104549 Nisar Pharmacy Inc. 229 East 149th Street, Bronx, NY 10451
10 Recitas Limited 824 E 156th Street, Bronx, NY 1045511 Rite Aid Pharmacies 650 East Tremont Avenue, Bronx, NY 1045712 Rite Aid Pharmacies 592 183rd Street, Bronx, NY 1045813 Rite Aid Pharmacies 352 E 149th Street, Bronx, NY 1045514 South Bronx Pharmacy & Surgical Supply 411 E 138th Street, Bronx, NY 1045415 West Farms Pharmacy 930 East Tremont Avenue, Bronx, NY 10460
Brooklyn 16 Berkley Pharmacy 1951 Flatbush Avenue, Brooklyn, NY 1123417 Canarsie Plaza Pharmacy 8707 Flatlands Avenue, Brooklyn, NY 1123618 CVS Pharmacy 2472 Flatbush Avenue, Brooklyn, NY 1123419 CVS Pharmacy 6702 Fort Hamilton Pkwy, Brooklyn, NY 1121920 Duane Reade Drug Store 2265 Ralph Avenue, Brooklyn, NY 1123421 Dyker Heights Pharmacy 8016 13th Avenue, Brooklyn, NY 1122822 Eckerd Drugs 8701 4th Avenue, Brooklyn, NY 1120923 Globe Drug Store Prescription Dept. 405 86th Street, Brooklyn, NY 1120924 Powells Pharmacy 7517 3rd Avenue, Brooklyn, NY 1120925 Remsen Pharmacy 8823 Avenue L, Brooklyn, NY 1123626 A Fair Deal Pharmacy Inc. 849 Broadway, Brooklyn, NY 1120627 Duane Reade Drug Store 416 Knickerbocker Avenue, Brooklyn, NY 1123728 Dumont Pharmacy Inc. 417 Junius Street, Brooklyn, NY 1121229 Gulshan Pharmacy Inc. 509 Raplh Avenue, Brooklyn, NY 1123330 Images Pharmacy 1383 Bushwick Avenue, Brooklyn, NY 1120731 Noha Pharmacy Inc. 291 Knickerbocker Avenue, Brooklyn, NY 1123732 Rite Aid Pharmacies 1631 Pitkin Avenue, Brooklyn, NY 1121233 Rite Aid Pharmacies 960 Halsey Street, Brooklyn, NY 11233
Manhattan34 Cherry's Pharmacy & Cosmetics 170 E. 84th Street, New York, NY 1002835 Corby Chemist 988 1st Avenue, New York, NY 1002236 CVS Pharmacy 1223 2nd Avenue, New York, NY 1002137 CVS Pharmacy 1294 Lexington Avenue, New York, NY 1012838 Duane Reade Drugs Store 1191 2nd Avenue, New York, NY 1002139 Duane Reade Drugs Store 773 Lexington Avenue, New York, 1002140 Duane Reade Drugs Store 630 3rd Avenue, New York, NY 10017
List of Surveyed Pharmacies
Pharmacy Name Address41 Duane Reade Drugs Store 465 2nd Avenue, New York, NY 1001642 Duane Reade Drugs Store 866 3rd Avenue, New York, NY 1002243 Duane Reade Drugs Store 852 2nd Avenue, New York, NY 1001744 East View Pharmacy 1751 2nd Avenue. New York, NY 1012845 Eckerd Drugs 1299 2nd Avenue, New York, NY 1002146 Elliot Pharmacy Prescription Dept. 250 3rd Avenue, New York, NY 1001047 Elm Drugs 298 1st Avenue, New York, NY 1000948 Health Wise Pharmacy 1494 York Avenue, New York, NY 1002149 Lascoff Fredk D 150 E. 82nd Street, New York, NY 1002850 Lustol Company 799 Lexington Avenue, New York, NY 1002151 Pollock Bailey Pharmacy 405 E. 57th Street, New York, NY 1002252 Rainbow Pharmacies 1449 1st Avenue, New York, NY 1002153 Rite Aid Express 1 Hour Photo NY 223 E. 86th Street, New York, NY 1002854 Rite Aid Express Pkg Service 1849 2nd Avenue, New York, NY 1012855 Rite Aid Pharmacies 542 2nd Avenue, New York, NY 1001656 Tower Chemist 1257 2nd Avenue, New York, NY 1002157 Drug Loft II 1412 Madison Avenue, New York, NY 1002958 Keane Pharmacy 586 Lenox Avenue, New York, NY 1003759 Lenox Pharmacy Inc. 27 Lenox Avenue, New York, NY 1002660 M&N Pharmacy 2240 3rd Avenue, New York, NY 1003561 Metro North Pharmacy 1972 1st Avenue, New York, NY 1002962 Rite Aid 1892 3rd Avenue, New York, NY 1002963 RX Center 2325 1st Street, New York, NY 10035
Queens64 Eckerd Drugs 4320 Bell Blvd, Bayside, NY 1136165 Eckerd Drugs 255-01 Union Turnpike, Geln Oaks, NY 1100466 Marathon Pharmacy 24917 Northern Blvd, Little Neck, NY 1136367 Rite Aid Pharmacies 3920 Bell Blvd, Bayside, NY 1136168 Rite Aid Pharmacies 218-35 Hempstead Avenue, Queens Village, NY 1142969 Rocky Hill Pharmacy Inc. 236-01 Braddock Avenue, Bellerose, NY 1142670 Roots Drugs Inc. 24908 Hillside Avenue, Queens Village, NY 1142671 Astor Pharmacy Inc. 3518 Ditmars Blvd, Astoria, NY 1110572 Central Pharmacy 1338 Central Ave, Far Rockaway, NY 1169173 CVS Pharmacy 2280 31st Street, Astoria, NY 1110574 CVS Pharmacy 271 Beach 20th Street, Far Rockaway, NY 1169175 Eckerd Drugs 3214 31st Street, Astoria, NY 1110676 Eckerd Drugs 3099 Steinway Street, Astoria, NY 1110377 Ideal Drugs Inc 1901 Mott Ave, Inwood, NY 1109678 Roger's Pharmacy 29-63 21st Avenue, Astoria, NY 1110579 Strand Pharmacy Prescription Dept. 2501 Broadway, Astoria, NY 11106
List of Surveyed Pharmacies
Pharmacy Name AddressStaten Island80 Annadale Family Pharmacy Inc 831 Annadale Road, Staten Island, NY 1031281 CVS Pharmacy 778 Manor Road, Staten Island, NY 1031482 CVS Pharmacy 1131 Bay Street, Staten Island, NY 1030583 Dongan Hills Pharmacy 1560 Richmond Road, Staten Island, NY 1030484 Duane Reade Drug Store 4363 Amboy Road, Staten Island, NY 1031285 Duane Reade Drug Store 3155 Amboy Road, Staten Island, NY 1030686 Duane Reade Drug Store 1795 Victory Blvd, Staten Island, NY 1031487 Pathmark Pharmacy of New Dorp 2660 Hylan Blvd, Staten Island, NY 1030688 Pharmacy Clove 1050 Clove Road, Staten Island, NY 1030189 Thompkinsville Pharmacy 45 Victory Blvd, Staten Island, NY 1030190 Walgreen Drug Store 1551 Richmond Avenue, Staten Island, NY 10314
New York City Council Investigation Division
NYC Pharmacies C-1
APPENDIX C:
Drug Retail Price List
DRUG RETAIL PRICE LIST
“CONSULT YOUR PHARMACIST FOR THE SELECTION OF THE MOST ECONOMICAL